Own two houses? You can still use ITR‑1 and ITR‑4 under draft rules. Here are the conditions

You may be allowed to file your Income-tax Return (ITR) in forms ITR-1 and ITR-4 for Tax Year 2026-27 even if you own two houses.

The draft Income-tax Rules 2026 have proposed to allow taxpayers owning up to two houses to file their returns in ITR-1 and ITR-4, provided they meet other conditions.

The previous Income-tax Rules 1962 didn't allow taxpayers to file ITR-1 or ITR-4 if they owned more than one house property.

Here are more details on who can file both these forms and who cannot

ITR-1 filing conditions

As per Rule 164 of the Income-tax Rules 2026, ITR-1 can be filed by a resident if his total income includes the following:

• Salary, pension, family pension

Two house properties, but without any brought forward loss or loss to be carried forward

• Income from other sources, but without any loss under this head. Winnings from a lottery or income from race horses are not allowed as income from other sources.

• Long-term capital gains up to ₹1,25,000 but without brought forward loss or loss to be carried forward under the head Capital Gains.

• Has assets, including financial interest in any entity, located outside India

• Has signing authority in any account located outside India

• Has income from any source outside India

• Is a director in any company;

• Has held any unlisted equity share at any time during the tax year

• Is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee

• Has agricultural income exceeding ₹5000

• Has total income, exceeding ₹50 lakh

Apart from the, there are some more conditions under which you cannot file ITR-1 under the draft rules.

ITR-4 filing conditions

As per Rule 164 of the Income-tax Rules 2026, ITR-4 can be filed by a taxpayer if his/her income is from the following sources:

• Profits or gains of business or profession, and such income is computed in accordance with special provisions referred to in section 58 for the computation of such income

• Long-term Capital gains not exceeding ₹1,25,000.

• Has assets (including financial interest in any entity) located outside India

• Has signing authority in any account located outside India

• Has income from any source outside India

• Is a director in any company

• Has held any unlisted equity share at any time during the tax year

• Has total income, exceeding ₹50 lakh

• Owns more than two house properties, the income of which is chargeable under the head "Income from house property

• Has any brought forward loss or loss to be carried forward under any head of income

• Is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee

• Has agricultural income, exceeding ₹5000

Please note these draft rules are likely to be implemented with effect from April 1, 2026, after final approval.